One major factor contributing to the demand for
electronic RFQ has been the
fragmentation of European
ETF trading across multiple
stock exchanges, which has
prevented the formation of
a single deep order book
and prompted demand for
deals to be struck in the
OTC market. The growth of
RFQ activity in the US has
been more recent.

“The increasing adoption
of RFQ platforms in the
US is one of the few occasions when a technological
innovation has flowed from
Europe to the US. Usually
it’s the other way round,”
says Aite’s Mindlin.

classes requires new connectivity, new data structures and protocols,”

Mindlin told the Trade.

“And technology vendorsare being forced to adoptnew models that are assetclass agnostic, meaningthey don’t have to rethinkthings every time there’s anew product or regulatorychange.”Mindlin lists up totwenty providers of elec-tronic RFQ platformsacross the fixed income,FX, derivatives and ETFmarkets, operating onboth a dealer-to-clientand dealer-to-dealer basis.Market participants citeITG’s RFQHub – as theengines and auto-quoteback, rather than relyingon a salesperson to shouttrade details to a trader andrespond, which risks trans-lation issues, confusion overthe exact ETF listing, and soon. Smaller and medium-sized trades can then bedone seamlessly, allowingbuy-side dealers to focus onlarger, more complex trans-actions,” Pace says.